Question :
143.In the rare instance when a par value stock issued : 1244166
143.In the rare instance when a par value stock is issued at a cash price below par, the excess of the par value over the amount of cash received should be
a.
credited to the Retained Earnings account.
b.
debited to an account titled Discount on Capital Stock.
c.
credited to a liability account.
d.
debited to the Retained Earnings account.
144.When common stock is issued by a corporation for a cash price above par value, the excess of the cash proceeds over the par value should be reported in the financial statements as a component of
a.
retained earnings on the balance sheet.
b.
operating income on the income statement.
c.
total liabilities on the balance sheet.
d.
total contributed capital on the balance sheet.
145.When stock is issued for noncash assets or services, the dollar amount to be recorded for this exchange is determined by the
a.
treasurer of the corporation.
b.
par value of the stock.
c.
market value of the stock or the market value of the consideration received when the market value of the stock cannot be determined.
d.
market value of the stock or the market value of the consideration received, whichever is greater.
146.The Additional Paid-in Capital account normally arises in the accounting records when
a.
the stated value of capital stock is greater than the par value.
b.
capital stock is issued at an amount greater than par value.
c.
the number of shares issued exceeds par value.
d.
the market value of the stock rises above par value.
147.Use the following information to answer the question below.
When Calvert Corporation was formed on January 1, 20×7, the corporate charter provided for 50,000 shares of $20 par value common stock. The following transactions were among those engaged in by the corporation during its first month of operation:
1. The corporation issued 200 shares of stock to its lawyer in full payment of the $5,000 bill for assisting the company in drawing up its articles of incorporation and filing the proper papers with the state agency.
2. The company issued 8,000 shares of common stock at a price of $25 per share.
3. The company issued 7,000 shares of common stock in exchange for equipment that had a fair market value of $160,000.
The entry to record transaction 1 would include a
a.
debit to Start-up and Organization Costs for $4,000.
b.
credit to Additional Paid-in Capital for $4,000.
c.
debit to Start-up and Organization Costs for $5,000.
d.
credit to Common Stock for $5,000.
148.Use the following information to answer the question below.
When Calvert Corporation was formed on January 1, 20×7, the corporate charter provided for 50,000 shares of $20 par value common stock. The following transactions were among those engaged in by the corporation during its first month of operation:
1. The corporation issued 200 shares of stock to its lawyer in full payment of the $5,000 bill for assisting the company in drawing up its articles of incorporation and filing the proper papers with the state agency.
2. The company issued 8,000 shares of common stock at a price of $25 per share.
3. The company issued 7,000 shares of common stock in exchange for equipment that had a fair market value of $160,000.
The entry to record transaction 2 would include a
a.
debit to Additional Paid-in Capital for $40,000.
b.
credit to Common Stock for $200,000.
c.
credit to Common Stock for $160,000.
d.
debit to Cash for $160,000.
149.Use the following information to answer the question below.
When Calvert Corporation was formed on January 1, 20×7, the corporate charter provided for 50,000 shares of $20 par value common stock. The following transactions were among those engaged in by the corporation during its first month of operation:
1. The corporation issued 200 shares of stock to its lawyer in full payment of the $5,000 bill for assisting the company in drawing up its articles of incorporation and filing the proper papers with the state agency.
2. The company issued 8,000 shares of common stock at a price of $25 per share.
3. The company issued 7,000 shares of common stock in exchange for equipment that had a fair market value of $160,000.
The entry to record transaction 3 would include a
a.
credit to Common Stock for $160,000.
b.
credit to Additional Paid-in Capital for $20,000.
c.
debit to Equipment for $140,000.
d.
debit to Common Stock for $140,000.
150.Use the following information to answer the question below.
When Calvert Corporation was formed on January 1, 20×7, the corporate charter provided for 50,000 shares of $20 par value common stock. The following transactions were among those engaged in by the corporation during its first month of operation:
1. The corporation issued 200 shares of stock to its lawyer in full payment of the $5,000 bill for assisting the company in drawing up its articles of incorporation and filing the proper papers with the state agency.
2. The company issued 8,000 shares of common stock at a price of $25 per share.
3. The company issued 7,000 shares of common stock in exchange for equipment that had a fair market value of $160,000.
The entry to record transaction 3 would include a
a.
credit to Common Stock for $140,000.
b.
debit to Common Stock for $160,000.
c.
credit to Equipment for $160,000.
d.
debit to Additional Paid-in Capital for $35,000.
151.A company purchases 300 shares of its $100 par value common stock at $110 per share. It then reissues 50 shares at $114 per share. The entry upon reissue of the stock would include a credit to
a.
Treasury Stock, Common for $5,700.
b.
Paid-in Capital, Treasury Stock for $200.
c.
Retained Earnings for $700.
d.
Gain on Sale of Treasury Stock for $200.
152.A company purchases 600 shares of its $100 par value common stock at $110 per share. It then reissues 100 shares at $114 per share. The entry upon reissue of the stock would include a credit to
a.
Treasury Stock, Common for $11,400.
b.
Retained Earnings for $1,400.
c.
Gain on Sale of Treasury Stock for $400.
d.
Paid-in Capital, Treasury Stock for $400.
